Due to favorable consumer response to what was initially a "while supplies last" offer, 8x8 has ramped up production of the broadband Packet8 DV326 VideoPhone and expects to continue to offer the $99 per phone purchase price and accompanying $19.95 per month, two-year service plan model unveiled earlier this month.
"As we expected, once we minimized the upfront equipment investment associated with owning a videophone, consumer demand increased as subscribers saw a more affordable opportunity to bring one into their homes," said Huw Rees, Vice President of Marketing & Sales at 8x8. "So far, the results have been positive and indicate that spreading the financial commitment over a two year service period is a palatable option for the consumer. We believe that consumers who are buying VoIP services that do not include video are investing in soon-to-be-obsolete technologies and services. Just as we see in the mobile phone market, consumers are beginning to expect video to be part of their communication services portfolio," concluded Mr. Rees.
The pricing model adopted for the VideoPhone service mirrors that which cell phone providers have been employing successfully for some time for advanced endpoint devices. The revenue generated by monthly subscriber fees over a two year period, combined with advantageous pricing resulting from 8x8's embedded technologies and its hardware vendor relationships, constitutes what 8x8 expects to be a formula for success.
"We are particularly pleased with the enthusiasm and results coming from 5LINX, the network marketing organization brought on by our partner TJF," added Mr. Rees. "With thousands of independent representatives presenting the Packet8 VideoPhone to family and friends, we expect a tremendous amount of valuable face-to-face exposure from this channel."
8x8 channel partner TJF Associates brought 5LINX on board as a Packet8 network marketing firm in March 2004. Headquartered in Rochester, New York, 5LINX provides business ownership opportunities to independent representatives throughout the United States. 5LINX uses a cooperative marketing approach to acquire customers for market offerings such as local, long distance, VoIP and wireless phone service, internet service, satellite television and two-way messaging. Since its establishment in 2000, 5LINX has built a network of over 13,000 independent representatives.
"We feel the Packet8 VideoPhone represents the next generation of telecommunications in both the U.S. and overseas," said 5LINX Vice President and Co-founder Jeb Tyler. "Our representatives are thrilled to have the opportunity to offer this unique, affordable and appealing communications device to their customers."
Available direct to consumers at http://www.packet8.net/, the $99 Packet8 VideoPhone is being sold with a two year service plan, which includes unlimited voice and video calls worldwide to another Packet8 Videophone as well as unlimited local and long distance voice-only calls to any phone number in the U.S. or Canada. The $19.95 per month, 24-month service plan carries an early termination fee of $299. All existing Packet8 VideoPhone service subscribers will also see a decrease in their base monthly service fees to $19.95 per month beginning with their May 1 billing statement.
About 8x8, Inc.
VoIP (voice over internet protocol) service provider 8x8, Inc. offers internet-based telephony solutions (http://www.packet8.net/) for individual residential and business users as well as small to medium sized business organizations. In addition to regular Packet8 VoIP service plans, priced as low as $19.95 per month for unlimited anytime calling to the U.S. and Canada, 8x8 now offers the $99 Packet8 DV326 VideoPhone, the industry's first stand alone broadband consumer videophone with worldwide video calling for $19.95 per month. Packet8 Virtual Office, 8x8's VoIP system for small to medium sized businesses, is a hosted PBX solution comprised of powerful business class features. For additional company information, visit 8x8's web site at http://www.8x8.com/.
About 5LINX
5LINX is a customer acquisition company which provides a business ownership opportunity to people all over the U.S., allowing them to take advantage of the incredible growth of telecommunications and the power of the Internet. For additional company information, visit: http://www.5linx.com/ .
Forward Looking Statement
This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, without limitation, statements relating to pricing and consumer demand for 8x8's videophone products and expectations of success selling videophone products and services. Investors are cautioned that these statements involve risks and uncertainties, and actual results could be materially different from those discussed in this news release. These risks include the risk that videophone pricing may change, consumer demand for 8x8's videophones may decline or not grow at all or that 8x8 may not be successful in selling videophone products and services. Further information on factors that could affect the actual results of 8x8, Inc. are included in 8x8, Inc.'s Quarterly Report on Form 10-Q for the quarter ended December 31, 2004, which is on file with the Securities and Exchange Commission. 8x8 does not assume any obligation to revise or update any forward-looking statements contained in this press release that become untrue because of subsequent events.
NOTE: 8x8, the 8x8 logo, Packet8, the Packet8 logo and Packet8 Virtual Office are trademarks of 8x8, Inc. All other trademarks are the property of their respective owners.
8x8, Inc.